Updated! – 8 tips to successfully handle finances in a marriage
Finances are often argued about in relationships. They don’t have to be a hot topic in yours.
Ensuring you and your partner are on the same page when it comes to family finances is simple with a little planning and lots of communication. Couples who argue over finances likely did not create financial goals and plans before combining households or before a shift like a job change. If you two fall into this category, it’s not too late for your future.
Understand Your Finances
Before making a goal for your future, it’s important for both of you to understand where you stand financially.
Whether you’ve been married for years or are just now combining households, start now.Go over income and debt with your partner before creating a financial plan and goals. This means sharing income, potential income including commissions and bonuses, and all debts. Be sure to consider monthly living expenses in your debt. If debts have an end date, such as loans, be sure to write those things down and begin to consider a plan for those funds once the debt is paid off. For example, will there be a plan for another loan, or will the extra funds go into savings?
Create Goals Together
It’s always a good idea to create multiple goals.
Start with long-term goals. Consider how you want to live out your retirement years. Do you want to travel together? Do you want to rely on or create income, so you don’t have to take on work when you are older?
Since you are creating a life together, setting long-term goals is imperative in planning your future.
Short-term goals are also necessary. Examples of short-term goals are getting out of debt, paying off student loans, saving for down payments, paying off a vehicle, or preparing kids for college. These goals aren’t long-term, but it still may take years to meet them.
Finally, together, set more immediate goals. These goals could include planning for an annual vacation or saving for the cost of holidays, buying new furniture, or saving for a down payment on a new vehicle. Once these immediate goals have been met, you two can create new immediate goals or revert back to long-term and short-term goals.
When you create goals together, remember to be inclusive of your partner’s desires as well. Your immediate goal may be to purchase a new car, while your partner disagrees. It is at this point in planning together, communication is key.
Remember to be an active listener and ask the same of your partner as you navigate the waters of financial wants and needs.
Communicate
Once you know where you are financially and have goals to work toward, it’s essential to communicate.
For some couples, this communication may need to occur weekly, with each paycheck, monthly, or quarterly. Though every couple may differ in their timing, it’s important for all couples to discuss finances and financial goals on a regular basis. Decide on this schedule together and adjust the calendar based on meeting goals throughout the year.
It’s also imperative not to deviate from your collective plan until you have communicated and agreed.
The Unexpected
Most couples find themselves in financial trouble when the unexpected occurs. These are often critical moments, such as job loss or an expensive injury or long-term health battle. It’s important to revisit your plans and goals long-term and short-term during and after these times of strife so that you can continue to reach for your dreams together. Expect the unexpected as much as you can, and set aside savings for just that, separate from dream savings.
But What About...?
Some find it irksome to share a budget that leaves very little room for a quick weekend getaway, surprise, or a gift without their partner knowing. Others might want more in their personal budget because they contribute more with a larger paycheck. There are a few questions to things to think about in this situations:
Have you agreed on a plan?
Does that plan leave money for discretionary spending?
If so, your plan needs to allow one another to spend discretionary funds without judgment.
If not, consider a plan with immediate goals to get your family to a point where you each have spending money and agree on parameters for extra spending.
Communication about discretionary spending is as important as other aspects of financial planning. Your partner might not mind if you spend your extra budget on a weekend getaway for the two of you, but they might be bothered if you spent your extra spending money on a jet ski that kicked their car out of the garage.
Understand which decisions should still be made together, and when it’s necessary to open up the lines of communication again.